Malawi has requested a four-year extended credit facility to help with balance of payments difficulties, the International Monetary Fund (IMF) said on Monday.
The donor-dependent southern African country has been experiencing acute foreign currency shortages. Late last month it allowed its kwacha currency to weaken 25% against the dollar.
“The authorities have requested an arrangement (on) the back of the protracted balance of payments problem,” the IMF said in a statement after talks with Malawian government officials and private sector representatives.
The fund said restoring debt sustainability and resolving a case involving alleged misreporting of foreign-exchange reserves were pre-requisites for IMF support.
“While the authorities are addressing these issues, the IMF team conducted a mission to agree on (a) macroeconomic framework, policies and reforms,” it added.
The IMF said it welcomed the move to normalise the forex market and that Malawi’s authorities had engaged a debt advisor to suport efforts to address unsustainable public debt.